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Teachers' pensions Cash Equivalent Transfer Valuation (CETV)
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Andrew1952
Posted: 09 January 2025 18:53:55(UTC)
#3

Joined: 06/07/2019(UTC)
Posts: 538
NoMoreKickingCans;330392 wrote:
public sector DB pensions are hugely valuable to the individual and hugely unaffordable for the rest of us.

CETVs vary enormously depending on assumptions about long term interest rates and inflation - both of which have gone through recent seismic changes.

If I was divorcing someone with a teachers pension I am not sure I would trust the scheme to provide an accurate assessment of the value of that pension.
As teachers pensions are DB I didn't think you could 'transfer out' anyway ?


The teachers pension fund is backed by an actual fund, albeit one that has an explicit
guarantee that the UK taxpayer would make up any losses.

QED it should be possible to transfer out somehow.

The NHS superannuation is totally unfunded so I don't know how a divorce would
be handled. Presumably the single accrued years would be divided at the point of
divorce and a second account created with this 'half' ?.

There are some interesting implications for all the other workplace benefts that a
member gets, like death-in-service lump sums and early payments if there are still
dependents in full time education. Would a divorcing spouse get any of this ?.
Answers on a postcard.
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Andrew1952
Posted: 09 January 2025 18:57:27(UTC)
#9

Joined: 06/07/2019(UTC)
Posts: 538
Molly M;330445 wrote:
Local authority pensions are funded and so they need to aim to balance their books as such. This means they’re able to offer a transfer value, where as most other (unfunded) public sector schemes cannot.

In my experience, local authority schemes pay quite low transfer values, compared to private company pensions. A few years ago we tried to transfer my hubby out of a small local authority pension and it just wasn’t worth it for the value given. From memory, it was around 20x the annual pension value.

The same as Tug Boat I found quite the opposite when I transferred my DB pension from a private company and they were very generous with their CETV (over 30x pension I think).

Maybe the rules and calculations are different for public sector pensions?

The local authority one was also poorly administered, they missed their own deadlines more than once and responded too late for a transfer in I was trying to organise. Quite frustrating to deal with (5 years ago).


20x is the same calculation used to (massively) undervalue the pension when assessing it
against the (temporarily suspended) Lifetime Allowance. Can't have it both ways !.
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Molly M on 10/01/2025(UTC)
AnthonyL
Posted: 09 January 2025 19:51:22(UTC)
#12

Joined: 27/07/2010(UTC)
Posts: 182

Thanks: 29 times
Was thanked: 144 time(s) in 68 post(s)
Molly M;330499 wrote:
AnthonyL;330469 wrote:
The question asked is the difficulty in getting a valuation so a divorce settlement can be reached as per the link I provided.

Why is it so hard to arrive at a valuation?


There’s some explanation about the reasons for general delays in this article:

https://www.teacherspens...sing-cetvs-and-psos.aspx


So basically someone thought it would be a good idea to change the system without having first defined the changes. Reading between the lines it seems as if agreement on how the two schemes should be handled is the issue and not one of then calculating the CETV. Like "it seemed a good idea at the time".

Quote:
The complexity of the cases means that production of the guidance has taken some time and we’ve not been able to progress cases until this was provided


Thank you for pointing this article out.
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1 user thanked AnthonyL for this post.
Molly M on 10/01/2025(UTC)
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